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CB 2024 Investment Risk Management

2024 Investment Risk Management Benchmarking Survey

The investment landscape has undergone significant change since we conducted our last Investment Risk survey in 2020. The COVID-19 pandemic, geopolitical issues, and the inflationary environment, just to name a few, highlight the ever-present investment risks. At the same time, new investment risks have surfaced. Climate risk and managing alternative asset risk ─ or including alts as part of a multi-asset class model (MAC) ─ now pose significant risk management challenges.

For the purposes of this study, ex ante investment risk management includes market, credit, counterparty, climate, and MAC risks, as well as the data, technology, and resources dedicated to a firm’s risk management practice. While operational risk plays an important role in a firm's overall risk management efforts, it employs methods and calculations that do not typically affect portfolio management. For these reasons, we have not included operational risk in this study.

This study identifies several key issues that relate to your firm’s risk management and best practices aimed at addressing these issues.
 
Organization and Governance
Structure for investment risk, including roles and responsibilities and how your firm governs its practices.
Investment Risk Capabilities
Capabilities around best practice risk models, methodologies, and reporting.
Investment Risk Types
Capabilities for each of the investment risk types covered: market, credit, counterparty, climate, and MAC risks.
Data Management
Processes for data integration and validation, maintenance and storage, and access.
Technology
System support for the processes of investment risk.
   
How will this information be used?
In preparing the final report, Cutter Associates will take the utmost care to protect the identity of all participants. In addition to anonymizing all response data, we will create meaningful segments (assuming there is sufficient data) to relate differences in operational and/or technology nuances. The types of segments we create will depend, to a large degree, on the characteristics of the firms in the response pool.

Directions for completing the survey:
The survey must be filled out and submitted online. If you have partially completed the survey and need to return to complete at a later date, you may save the survey by clicking on the ' Save and continue later ' link located in the blue toolbar at the top right of the screen. You will then be prompted to supply an email address to save your progress. A unique link will be emailed to you that will allow you to return where you left off. You can share your unique link, or print a copy from your browser to facilitate collaboration on your response (Use the [Ctrl] + [P] keys to print).


Note: Please use the [Tab] key to navigate from one text box to the next. Hitting the [Enter] key may inadvertently submit your response.

Questions that do not apply or the answer is unknown should be left unanswered. If you select a response in error, you may clear the response by selecting the same response again.

Definitions are provided for words that appear highlighted in green. To view the definition move your cursor over the highlighted word.

If you would like to provide additional information or commentary within your response, each category has a commentary section provided for free form responses.

To return a completed survey, please click on “Submit Completed Survey” button found on the end of the survey after the last question.

Questions?
For any questions or any additional information, please feel free to contact us at benchmarking@cutterassociates.com or the following:
 
Jon Chandler
Director, Cutter Research
Cutter ASSOCIATES
US: +1 339 469 7528

jchandler@cutterassociates.com
Beth LaGambina
Director, Member Services
Cutter ASSOCIATES
US: +1 339 469 2083
blagambina@cutterassociates.com